HQS

[la-onda]

updated from BLog:
HQ Sustainable Maritime Industries (HQSM:OTCBB) (02-13-05 Closing Price $0.28 USD) Strong Speulative Buy - 12-month target price: $0.65.

HQ Sustainable Maritime Industries is a very interesting company which has positioned itself in a very interesting and potentially lucrative market, aquaculture a.k.a. fish farming. This might not sound like a sexy industry, but if present results are any indication, this a fast growing industry with lots of profits to be made. They describe their business activities as follows:

"The Group is principally engaged in the vertically integrated business of aquaculture through co-operative supply agreements, ocean product harvesting, and processing and sales of farm-bred and ocean harvested aquatic products. The principal products are cross-bred hybrid of tilapia and white-legged shrimp exporting, directly and indirectly, to the United States, Canada, Japan and European countries".

In other words, HQSM is a vertically integrated seafood company focusing on the production and distribution of tilapia and shrimp, who obtain their fish through supply agreements with local fish farmers. Tilapia is one of the fastest growing seafood products, with American demand growing from almost nothing 10 years ago to more than a $175 million/year market today. HQSM demands strict quality standards and work with their suppliers to ensure a high quality product grown under certain conditions and practices. The extensive use of nutraceutical feed plays a large role in HQSM's quality control. HQSM uses the highest quality nutraceutical feed to promote healthy zero-toxicity fish. According to food and agriculture organization of the United Nations "There has been a consistent downward trend since 1974 in the proportion of stocks offering potential for expansion, coupled with an increase in the proportion of overexploited and depleted stocks, from about 10 percent in the mid-1970s to close to 25 percent in the early 2000s... Information available continues to confirm that, despite local differences, the global potential for marine capture fisheries has been reached, and more rigorous plans are needed to rebuild depleted stocks and prevent the decline of those being exploited at or close to their maximum potential." Natural maritime stocks have been over-exploited and may continue to decline if they are over-fished. In the future growth in supply will have to come from aquaculture and HQSM is one of the leading aquaculture companies in the world and thus are well organized to exploit these trends.

In addition to the sale of fish, HQSM is also engaged in the production and sales of patented marine bio-products and healthcare products in China. These products consist largely of shark based nutraceuticals for human consumption, e.g. Shark Liver Oil Blend with Vitamin D and E. These products have been developed through years of research through a partnership with Qingtao Ocean University and its Marine Bioengineering Research Institute. Traditional Chinese Medicine reveres the shark for its strength, vitality and power, as well as for more scientifically quantifiable health benefits. Chinese nutraceuticals plays have been one of the best plays of the last year, with AOB up over 500% since its low this year and SUWN up a remarkable 4750% since its low of the year. The nutraceutical division at HQSM is certainly something that I like to see. Nutraceuticals are a particularly flexible division, in that there are a few strategic options which are all fairly attractive. HQSM may develop this operating line further, leveraging their maritime expertise and capabilities. They can utilize the division for cash generation purposes to fund their larger ambitions of zero-toxin aquaculture. Finally, the Chinese nutraceutical industry is undergoing a fair bit of consolidation, led by CEOs like Tony Liu of American Oriental Bioengineering. These companies would potentially like to acquire a profitable nutraceutical division.

The nutraceutical division itself has been a strong driver of HQSM's growth this year, with profits for the division increasing over 400% for the first 9 months of 2005. Consolidated growth over the last year has been explosive, with revenue increasing 116% year over year for the 9 months ended Sept. 30. Net income increased at an even faster rate increasing to $1,980,921 from 370,072, an increase of 435%. This kind of profit increase is not to be expected going forward, nonetheless, management expects to see 30% growth going forward. Trailing 12-month earnings are $3.74 million, and with a weighted diluted average share count of 102,693,123 as of September 30, earnings are 3.6 cents per share. Based on Monday's closing price of 0.28, this equates to a price/earnings ratio of 7.7.

Over the next year, HQSM plans to grow its aquaculture division through the construction of a feed mill, as well as the expansion of their production line and the purchase of 2 additional flash freezers. These additions should help HQSM to gain additional economies of scale in their aquaculture production. This will be important going forward to improve their return on assets for this particular division. The strategic focus of HQSM going forward is based on the development of a North American distribution capability centered out of their new corporate headquarters in Seattle. They have chosen to market their product as premium zero-toxin seafood. HQSM's management believes that going forward, branding the zero-toxin nature of their products will allow them to gain an extra premium on the price of their goods. Toxicity in seafood has become of particular concern over the last few years, with people being advised not to eat tuna more than a couple times per week due to high mercury levels. The concern of mercury and other aquatic toxins are unlikely to decrease in the near future and very well may increase going forward. HQSM has obtained the HACCP certification for exporting aquatic products to the US and Japan. In addition to this certification, they have also been assigned an EU Code for exporting aquatic products to the EU. The company claims that this designation is "highly coveted since very few new attributions of code are being accepted". These 2 certifications, will allow HQSM to export to these Western markets which are more likely to pay a premium price for its zero-toxicity Tilapia and Shrimp.

Over the last year HQSM has undergone many important financing events. They recently issued a $5 million convertible debenture, which is convertible at $0.30/share and has warrants attached with strike prices between $0.35-$0.40. This financing has adversely affected the share price recently, but with the financing in the past, and the share price still hovering around the conversion price, anywhere in the $0.27-$0.32 region is a great buying opportunity in my opinion. As well, management has secured $70 million in loan guarantees from ALPS Corp, an international investment bank. The terms of the loan call for the principals of HQSM to surrender a controlling block of their shares as collateral for the loan, as well as the appointment of 2 members for ALPS to the board of directors. It is uncertain if HQSM will exercise these loans, but it gives them flexibility, access to capital and growth option for the future.

HQSM is undergoing many changes over the next year, they are beginning to market their products more aggressively in North America and have expanded their production facilities. HQSM is well poised to take advantage of the growing demand for seafood, and the declining availability of exploitable natural fish stocks. This is a company that is already profitable, but is quickly growing and making a lot of capital expenditures. Considering the growth, and somewhat risky nature of the expansion of business, I am rating HQSM a strong speculative buy with a price target of $0.65, based on a TTM P/E ratio of 18.

[JKN]

Showing some life here... it it breaks .36 on solid volume, its got headroom up to .44.

[shipman]

Nice eye on that one JKN.  Let's see if it holds today.  That volume looks pretty compelling. 

[alien41]

Have been thinking of jumping in on this one for some time.  Was wondering if anyone has a position and what the potential is for reaching higher ground.  Thanks in advance.

Alien

[JKN]

HQSM is a great fundamental play.  Go through this thread for details.  As I stated above I thinkwe have room up to .44 if we get some more volume.  The volume today. although good, may not be enough to show up on the radars, we'll see.  It doesn't appear to be much of a trader's stock anyway.

This is a long-term hold for me and I'm averaged in at .39.  Personally, I don't see myself selling for at least another 6 months unless it just goes parabolic.

I don't think you'll see wild swings in this based on its past history.  The only reason I haven't bought more is because I've been short on cash.  Obviously, there is strong support around .30 and unless they get bad news, they'll stay above that.  They need some news to rekindle the fire.

I started to comment today when it hit .36 that it looked an ascending triangle formation (ceiling at .36) nearing the crossover point.  It blew right on past .36.

[alien41]

Well JKN, looks like you were right on with HQSM.    It hit .44 today.  Unfortunately I miss the boat.  Maybe next time. Good luck on your trade and thanks for responding.

Alien

[bigdogs99999]

HQSM will probably run into earnings - it has done so before and is starting to move.  Also a great press release today! 


HQSM Rolls Out Its Zero Toxin Tilapia Brand "TiLoveYa"(R)

BRUSSELS, BELGIUM--(MARKET WIRE)--May 9, 2006 -- HQ Sustainable Maritime Industries, Inc. (HQ) (OTC BB:HQSM.OB - News), a leader in zero-toxin integrated aquaculture and aquatic product processing, announced today at the European Seafood Exposition in Brussels, the largest Seafood show in the world (See http://www.euroseafood.com/), that it has rolled out its new zero-toxin Tilapia brand "TiLoveYa" ®. The brand is designed to celebrate the health benefits of HQ's Tilapia produced in the pristine Hainan Island, China, an ecological haven where polluting heavy industry is not allowed. The Island economy has been centered on tourism and agro-food production. HQ's freshwater Tilapia products are furthermore made without hormones, antibiotics and free of the levels of heavy metals and other toxins associated with Ocean-raised products. Mercury levels in Tilapia are negligible when compared with almost all Ocean-Caught species according to the FDA (See http://www.cfsan.fda.gov/~frf/sea-mehg.html). Finally HQ has begun the certification process for its processing plant in China to ACC standards (The Aquaculture Certification Council, see http://www.aquaculturecertification.org/). These standards are required by such retailers as Wal-Mart and focus on the quality of production as well as the environmental and social impact of its operations.

Lovers of healthy zero-toxin products will love HQ's "TiLoveYa" ® Tilapia.

[maverick12]

I have been watching this stock for last 6 months. It seems that it over exposed because of so much Pumping and PR. It is way diluted too. IMHO

[JKN]

HQSM is waking up, up +10% on solid volume.

[422fwhp]

Coming alive with some volume behind it.  Anyone?  I picked up some at $.28 (and .281 )

Found this too: http://www.stockhouse.com/bullboards/viewmessage.asp?no=12576102&t=0&all=0&TableID=0

HQ's New "TiLoveYa(R)" Brand a Hit
Monday July 17, 8:08 am ET


New VP Predicts Major Sales Increases


SEATTLE, WA--(MARKET WIRE)--Jul 17, 2006 -- Trond Ringstad, HQ's new Senior Vice-President Sales and Distribution, with Sustainable Maritime Industries, Inc. (HQ) (OTC BB:HQSM.OB - News), a leader in zero-toxin integrated aquaculture and aquatic product processing, has completed a whirlwind survey of customer reaction to HQ's new zero-toxin "TiLoveYa ®" branding and has been overwhelmed by the reaction. The strongest reaction has been from three large national retail chains. Details will be released once arrangements have been finalised. Trond has also overseen the updating of HQ's web site to reflect the new marketing theme, "...All Tilapia are not created equal, 'TiLoveYa®,' zero-toxin Tilapia products for lovers of healthy food."
Said Mr. Ringstad, "The response to HQ's zero-toxin, quality-first, vertically integrated model as represented by the 'TiLoveYa®' brand has exceeded all of my expectations. Recent reports of banned substances used by competing corner-cutting producers in China where dozens of exporters have been shut down, only enhances the importance of HQ's vertically integrated approach. Finally the public has a choice...'TiLoveYa®.'"

Trond Ringstad, owner of Pacific Supreme Seafoods (http://pacificsupremeseafoods.com)) and pioneer in the sale of Tilapia for his former employer, Royal Supreme Seafood (http://www.royalsupreme.com/),, has been hired by HQ as Senior Vice-President Sales and Distribution. In addition, HQ has acquired, for cash and restricted common stock, the goodwill of Mr. Ringstad's company, which includes a network of agents, who are expert in the sales and distribution of Tilapia products, as well as a thriving seafood sales and distribution business including such products as shrimp, crab and scallops. These additional products will help HQ penetrate the retail seafood market in the United States and, later this year, Europe. Mr. Ringstad has signed a three-year contract in virtue of which he is expecting to achieve in excess of US$15 million in sales for his first year, after a period allowing for the roll-out of its new branding and marketing campaign over the next few months, with a minimum 10% annual increase for the subsequent years.

laterz...Jody

[JKN]

More good news.

HQ Secures Organic Tilapia Supply: Capacity to Double
HQ Expects to Be the World's #1 Organic Tilapia Producer

SEATTLE, WA, Aug 08, 2006 (MARKET WIRE via COMTEX) -- HQ Sustainable Maritime Industries, Inc. (HQSM) a leader in zero-toxin integrated aquaculture and aquatic product processing, announced today it has signed a conditional agreement with the Government of Tayang Town, Qionghai City, Hainan Province, to partner with cooperative farms operating an additional 10,000 mu (Chinese measure which is equal to 1,647 acres) capable of producing some 20,000 tons of tilapia live weight.
This will double to 3,294 acres the farming capacity available to HQ. The agreement is conditional on the completion of financing for the construction of a new feedmill and processing plant in the immediate vicinity of the farms. Everything produced will meet organic standards as defined by Naturland, whose standards are currently adopted by the FDA.
Qionghai is about 40 minutes from HQ's current cooperative farms in Wenchang and is in close proximity to one of the best fresh water reservoirs in Hainan. All of the farms are in one township and thus in immediate proximity to each other, a factor required for organic certification.
The total project cost will be approximately US$30 million. Management believes that, as a result of this agreement, HQ will be the world's largest producer of organic tilapia. HQ management expects, through its current TiLoveYa(R) marketing and branding campaign, to see strong growth and increasing consumer awareness of the importance of toxin-free aquaculture products that achieve organic standards.
These cooperative farms have accepted terms and conditions which management believes are much more beneficial for HQ than the current cooperative agreements. Each farm will have to acquire feed from HQ's mill to meet the Company's strict organic standards, and to accept company feed financing to access HQ's new processing plant in this township. The arrangement reduces the risks for the farmer and, in management's belief, provides HQ a much greater percentage of profits from feed to processing than is currently possible. These certified organic farms will not be allowed to sell their production to other processors unless HQ is unable to buy their production.
The new processing plant will have 6 production lines with value-added capabilities allowing HQ to make fish sticks and fish patties as well as fillets and whole round products, as currently is the case.
The new feedmill will produce organic floating feed, which is the most efficient feed for such farming operations. There is no floating or organic feed production in Hainan currently. Production will satisfy not only HQ's expanded demand for its combined aquaculture farms in Wenchang and Qionghai. It will also provide feed for such other aquaculture operations in Hainan as shrimp and other farmed species. The plant will manufacture some 100,000 tons annually of feed and will source organic non-GMO corn and soya from China and abroad.
Regarding the agreement, Norbert Sporns commented, "Such agreements are possible for our organization because of the leadership role HQ plays in developing Hainan's aquaculture industry to global standards. We are a 'Dragon Head' company designated by the Government of China as an industry leader. This status is possible through the pioneering work of our Honorary Chairman Mr. Wang Fusheng, to whom all of us are indeed grateful."

[JKN]

More news for HQSM.  Volume is up a bit lately and several bits of news that have all been favorable.  If the sales improve from the partnerships and new hires (and they don't dilute), this will most certainly move.  May take awhile for the numbers on sales to show up though.  It has built a solid base around .30.  On the upside, if we break .34 on volume, .40 is in play, break of .40 puts .44 in play.  On the downside, if we break .26...lookout below.

Of course, JMHO.  It might be worth somebody with some technical experience to take a look at the price action since last year's highs.  Looks like a well-established downtrend line and a soild bottom at .26.

HQSM Hires New Retail Sales Manager
Robert Emel Brings Years of Experience in the Seafood Industry

HQSM, a leader in zero-toxin integrated aquaculture and aquatic product processing, announced today it has hired Robert Emel to head up HQ's retail and value-added sales and branding.
Mr. Emel has been working in Alaska and the Pacific Northwest for many years, managing various value-added seafood companies and was responsible for a ten-fold increase in sales in his last position.
"He has built up and sold several seafood-related businesses and has a unique results-oriented approach which is key to success in the industry," stated Trond Ringstad, HQ's Senior Vice President of Sales and Distribution.
Said Mr. Emel, "I have been watching HQ's revolutionary marketing approach and just had to join the team. The opportunity represented by HQ's zero-toxin, quality-first, vertically integrated model -- as represented by the 'TiLoveYa(R)' brand -- is unprecedented."
Said Mr. Ringstad, "I have known and worked with Bob for years and expect he will make an immediate impact on sales as we continue to rollout our new brand 'TiLoveYa(R).'"
About HQ Sustainable Maritime Industries, Inc.

[bocasva]

This looks like significant news and at .26 the risk/reward ratio is very atractive......

Record Third Quarter Revenues for HQ Sustainable Maritime Industries, Inc
http://biz.yahoo.com/iw/061106/0180518.html

[bocasva]

My .26 support entry still did the trick on HQSM today....I expect momentum to build from now on until actual numbers are released.  Good volume, can't complain about that.

[phabrux]

HQSM.ob  -------------is now -------------->  HQSB.ob (with a Reverse stock split of 1 for 20)
HQSB.ob  just did a bref breakout last week of a long descending resistance line starting 13 months ago.
Formerly called HQSM.ob, the stock went back to the 13MA level last friday.
The recents news will make the stock interesting to watch!
I have this stock since the time of the       Penny on fire Portfolio!
Good luck with all your trades....make some $$$



HQ Sustainable Maritime Featured Tonight on "Business & Beyond" on Chicago's CLTV
Wednesday January 31, 9:17 pm ET

SEATTLE, WA--(MARKET WIRE)--Jan 31, 2007 -- HQ Sustainable Maritime Industries, Inc. (OTC BB:HQSB.OB - News) (formerly HQSM), "HQ," a leader in toxin-free integrated aquaculture and aquatic product processing, today announced that CEO Norbert Sporns is featured in the PTGTV educational series, "Business & Beyond," to air to Chicago audiences over CLTV Chicagoland Television each Thursday throughout February 2007, with the first showing tonight.

The segment, part of "Business & Beyond's" Models of Excellence feature, is to be broadcast February 1 (tonight), 8, 15 and 22 at 1:00 AM on CLTV, Chicago's Emmy Award-winning 24-hour news channel, which reaches more than 1.8 million households. CLTV has received numerous regional Emmy, National Press, Associated Press and other awards, recognizing the channel for its programming excellence.

"Business & Beyond" calls attention to HQ in a segment on "Toxin-free aquaculture," part of its Models of Excellence feature. The story, filmed in China and Seattle, highlights HQ's toxin-free vertically integrated Tilapia business. The series also touches on the increased concerns regarding toxins in ocean-sourced products and the solutions that HQ's farmed product can provide.

"We are very pleased that this educational series, produced by PTGTV, continues to bring the story of HQ's toxin-free 'TiLoveYa®' products to large consumer and business audiences throughout the United States," said Mr. Sporns. "Consumers are rightfully concerned about increases in toxicity levels in seafood and need to be informed about what choices exist. 'TiLoveYa®' is a fun brand that addresses the serious need for the lowest toxicity levels possible in food."

PTGTV's "Business & Beyond" program was broadcast in Pittsburgh and Cincinnati in November and December 2006, respectively. In January 2007, it reached audiences in Salt Lake City. It will continue to be broadcast to major U.S. markets throughout 2007.

The company (formerly HQSM) recently completed a 1-for-20 reverse stock split, and has applied and is expected to be listed on the American Stock Exchange by the end of the First Quarter, 2007.

HQ also announced in December 2006 that it has broken ground for the first organic-extruded feed mill in Hainan which will produce 100,000 tons of organic floating feed and is expected to be completed in the Fourth Quarter of 2007.